No More Offshore Partnerships, It’s Now EBT All The Way

Starting from today thousands of contractors currently paid through offshore partnership schemes will now need to find another solution. HMRC have specifically targeted the reciprocal tax agreements that allowed many of these schemes to work leaving contractors looking for another solution. Whilst the common misconception is that only handfuls of contractors are paid this way in reality many thousands have taken advantage of the various double taxation agreements offered by the UK Government in recent years. HMRC in removing that option are going to affect the earning potential of thousands of high net worth individuals.

UK Contractors looking to make the most from their contract should now maybe be looking towards EBT (Employee Benefit Trusts) as a viable option. An EBT is a legitimate way of rewarding high worth key members of staff. Several offshore companies are offering EBT schemes to UK contractors. To benefit from an EBT you become an employee of a company that can then issue extra payments to you in reward for your extra value. Obviously it is a little bit more complicated than that but that is how they work in general.

In the past the EBT route has offered less of a return than an offshore partnership but with the options now being limited more and more contractors will be seeing EBT as a viable payment solution.